To start with, for your partition setup, this:
multi(0)disk(1)rdisk(0)partition(2)\WINDOWS="Windows XP Professional" /fastdetect
should be this instead:
multi(0)disk(0)rdisk(0)partition(2)\WINDOWS="Windows XP Professional" /fastdetect
although that may not be all there is to it: When you installed XP on the second partition, it probably installed some critical boot files to the first partition. By installing ME on the first partition after XP was installed, you would have overwritten some of the XP boot files with ME's versions. This is why it's always recommended that you install the newest OS last; older OSes may not be natively aware of XP.